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Financial Situation Update advice


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Hello - I currently have a 10% interest rate on my 2014 car, I owe $8,991 and have 29 monthly payments remaining for $333 per month. My car is worth about 7,800 (Edmonds FMV estimator). When I purchased the car I was not in a good financial situation, this has since changed and my credit score is 730 now and the household combined monthly take home pay is $10,000.  I have received offers to refinance my car but I would really like a new car. I am looking for advice if I should refinance and pay the car off or purchase a new car? I would probably look at selling it privately and then paying off the loan and then just purchasing a new car with a good interest rate?

 

thank you 

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Now is probably the worst time in our lifetimes to buy a car (new or used).

 

Prices are insane, inventory is low.  It's a seller's market.

 

I would defer any discretionary car acquisition at least six months, perhaps longer.  

 

I have a 36-month lease ending in June of 2022, and I'm already concerned that I won't be able to find a suitable replacement at a reasonable cost.

 

There is really only upside to refinancing now, and then you can monitor the vehicle market for signs of softening.

 

 

Edited by cv91915
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You could potentially refinance for a lower rate, but the savings would be minimal in the long run.  For that small of an amount and with the funds you state are available, I would look to shovel as much each month at the note to burn it as quickly as possible. 

 

What CV points out is very much a real situation...each day, I drive past various lots that have tons of open space.  The used lots that depended on auctions for inventory have very few vehicles precisely because the new car dealerships are keeping more of their trades.  On occasion, you catch a break like I did last month when I added a new toy...but I got the deal precisely because it WAS a toy...two-seat convertible from a manufacturer leaving the US for the second time in my life.  Seems that the dealership deals with a lot of subprime payment shoppers and the finance companies that handled that segment wouldn't finance FIAT among a few other brands. 

 

At some point, there may be a glut of new vehicles as the chip shortage eases, but that moment is not THIS moment in time.  Keeping something that you KNOW and can quickly avoid a payment on is the fiscally prudent thing right now. 

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